User talk:Dtsurjum

Üldinfo

Pealkiri: Elektrooniline raha, olevik ja tulevik.

Autors: Dmitri Tšurjumov, Mark Selezenev, Igor Budnitski, Leonid Grigorjevski, Jakov Kanyuchka.

Kursuse nimetus: IT sotsiaalsed, professionaalsed ja eetilised aspektid

Õppejõud: Kaido Kikkas

Esitamise tähtaeg: 12.05.2017

Sissejuhatus

Electronic payment system.

Unique opportunities that the internet provides have sharply changed our way of living. Fast search of any information on the internet, communications via the internet or meeting new people via the internet does not surprise anybody anymore. But one of the most marvellous achievements of the internet age/internet of things is that we can buy and sell goods and services via it. This is something that is accomplished by electronic payment systems and virtual money that comes with them.

Virtual currency did not appear long ago but majority of the users of the internet do trust them. Virtual currency is easy to use not only for real persons but also legal entities like companies and corporations. This kind of payment method is accepted by different freelancers, companies, commercial entities and also governmental institutions.

So what is so interesting and alluring about Electronic payment systems?

• 1) One of the main advantages of the electronic payment methods is its super fast speed. All of the process can take no longer than a minute if not few seconds.
• 2) Electronic payments are not burdened with the same inconveniences that come with regular payments: long lines, lunch breaks, rude service agents.
• 3) To use these kinds of payment methods, you technically need 1 thing: access to the internet. You can perform them via a phone, computer, notebook and many other electronic devices. These kinds of devices are used by the majority of the world population.
• 4) You can use them at any place at any given moment.
• 5) You can increase your virtual currency account or withdraw money from it by different means. Most often terminals are used for this along with bank account transfers. Considering how wide spread virtual currency is nowadays, some banks already keep virtual currency bank accounts from which you can withdraw or add balance via the standard banking systems.

This currency is definitely more widely used in larger cities because there are more opportunities to use them there.

Besides buying goods, virtual money can be used to pay for services, especially services that are provided by different social networks. These kinds of payments are often used by video game players, mobile phone owners to pay for the services or the internet.

Electronic payment systems will undergo a full change in the near future because of increased competition that comes from new virtual currencies appearing. If anybody is planning to open an internet store then there is simply no way around this. You have to have an inbuilt electronic payment system that will suit your customer’s needs. Otherwise you will loose on possible orders and will have a loss in income/revenue.

PayPal

The inventions of the telegraph in 1837 lead us to a financial revolution that has changed the world greatly. By the start of the 20th century 80% of all international banking payments were done via the telephone.

In 1924, the United States invented and developed a system of mutual settlements, taking into account the financial obligations of counterparties, the so-called "clearing". The principles of this system are still used. Thus, it was the beginning of the so called “non-cash payments”.

However, by the end of the 20th century, more and more places began to gain e-commerce. But because of this there happened a large inconvenience – you have issued a purchase through the Internet, but to pay for it you still needed to go to the bank? Very Uncomfortable!

The first attempt to simplify the payments for the Internet purchases was made in California in 1994. A DigiCash service, that was invented by David Lee Chom, didn’t live for long. It was around 10 years before online shops started to become more popular.

The service went bankrupt, apparently it was ahead of its time, because of that in 1998 the PayPal system was created, with the help of which it was possible to send money online. By this time, the need for electronic payments was much higher than four years ago. The creators of this EPS were concerned about the safety of their service so seriously that it not only lived happily to this day, but continues to flourish to this day.

PayPal was created in 1998 by former lawyer and financier Peter Thiel and programmer Max Levchin. The project that Tiela and Levchin created immediately interested investors: for example, Nokia Ventures immediately invested $ 3 million in to the project, and Deutsche Bank - $ 1.5 million. The reason for this interest in the project was that the virtual market at that moment was acute and needed a financial operator that would perform the functions of an online bank, and there were no similar structures on the Internet yet.

PayPal started operations in November 1999 and immediately attracted even more investors, including banks that invested $ 23 million in PayPal. The rapid growth of the Internet caused a large influx of users. In a short time, the number of PayPal customers exceeded 1.5 million, and its turnover reached $ 2 million per day!

Paypal payment system essentially differs from other electronic payment services that it deals with real money, and not with "title signs". Paypal offers a financial instrument through which a credit card or bank account is linked to a user's account in Paypal, so that at any time it is possible to directly replenish your balance in the system or withdraw money from it.

Paypal revolutionized the world of mobile technology, making real-world instant payments with a mobile phone (Paypal Mobile Payments). Users who subscribe to this service make payments via SMS without even going to the Paypal site. To do this, send a text of the type "Send $ 20 to [user ID]" to the specified number, type a confirmation code, and the payment will be sent immediately. However, this feature can only be available to US residents at the moment.

Along with the undisputable advantages, PayPal also has drawbacks as it must be said, which are usually linked to conscientious/diligent work of the security service of the system. One of the related inconveniences relates directly to us with you: Estonian citizens still look at many of its delights from the side and unable to use them, since MasterCard users can not use its services in full (and Visa is only represented as a temporary virtual account in SEB and nowhere else). Therefore, we can only pay through the system! If we are planning to sell something using PayPal than we can’t withdraw the money straight away and the withdrawals themselves need to be done in large sums to still retain a profit.

The system is generally known for a series of scandals involving the blocking of funds on customers' accounts or simply freezing accounts in case of suspicions activity or any suspicion from system administrators that the account does not belong to the user. Angry customers even created sites www.paypalsucks.com and www.paypalwarning.com. They host the so-called "Wall of Shame" (Wall Of Shame), which collects "horror stories", told by those who suffered from PayPal. In defence of Paypal, we can say that no EPS, except it, can boast such a large user audience, and the larger the customer base, the greater the absolute number of dissatisfied customers, and in percentage terms such statistics can’t be really measured because nobody really has the statistics for each company percentage wise. In addition, the burden of leadership in the industry is difficult for any company, because every mistake and miscalculation becomes public knowledge and is dealt with increased attention.

In the PayPal system, there is a possibility of automatic exchange of currencies, i.e. If the sender's account is opened in a different currency than the beneficiary's account then the payment will be converted into the desired currency. For the currency conversion transaction, the system charges a commission of 2.5%. If the exchange rate in the system does not suit you, you can choose a different centre that is converting your banks monkey from which the payment is made.

The main security measure in Paypal is a refusal to serve anonymous clients: they are subject to limits that make the work with the system almost impossible. Verification of the credit card is designed to confirm the identity of the owner of the used card. The security service rate seems to be based on the lack of anonymity and the possibility of attracting state security services in the event of a hacking of the accounts, as well as a rigid restriction of access to work by a system to prevent suspicious user types which applies to many countries in the world. Apparently, these measures are very effective: The losses of the auction eBay because of fraud is only 0.2% from the total amount of transactions (Paypal is the base payment system for eBay).